Market Update Report, Jan First Week

Congratulations to Bitcoin! Today is January 3rd, nine years ago, the first block of Bitcoin network was mined by Satoshi Nakamoto. Congrats also that the network fees have dropped a bit recently.

The correction, which began with the start of trading in the CME future contracts, continued this week, as the price declined to an average of around $13K. After reaching bottom supports of around $12K, it is not clear where it is going from now. It seems that we have entered a state of accumulation, which has led to a massive influx of new investors into the Altcoins market, and has surged by hundreds of percent this week.

Despite the market volatility, the trend seems to be positive. An increase of the bitcoin leads to a correction, but these are short and healthy corrections, and cannot stop the ongoing Altcoins rally. In addition, it is impossible to ignore the rise in Ripple’s currency, the XRP, whose market cap has exceeded the 100 billion mark and has risen to about $110 billion. This is almost half the market cap of Bitcoin. We see an inverse correlation between the altcoins and Bitcoin (which has reached a low of 35% Bitcoin dominance over the altcoins this week) and the more Bitcoin goes down, the stronger the altcoins market becomes.

dominance

In the near future, SegWit’s implementation of Bitcoin network is expected to expand, and may reduce network traffic. This will hopefully lead to a cutback in transaction fees. It will be interesting to keep an eye on how this step will affect market dominance. We will also be looking out for how the market will respond to a drop in trading volumes.

With sharp rises in the crypto market, it’s important to mention that this is a very speculative and volatile market. Therefore, it is important to be careful and learn about each project before investing in it: technology, the team behind the project and more. In addition, for new investors, we recommend learning about cautionary rules and guidelines for investing in the crypto market and the types of wallets and various levels of security they offer.

Each day we can see the interest in the crypto markets: the daily volume of the crypto market has reached tens of billions of dollars in the last month, and the total market value has reached a peak of about 700 billion dollars. It appears that this interest is expected to continue in 2018, partly due to the renewal of futures contracts, and due to the growing interest in the ICO markets (after a slight slowdown at the end of the year).

Regulation

Two weeks ago in South Korea, the government made an announcement that would forbid banks from engaging in any kind of cryptocurrency related activity. The country’s two largest banks in response, announced they would stop granting credit card points for converting FIAT to Bitcoin

In accordance with previous announcements this month, the government of South Korea unveiled new legislation on cryptocurrencies last week, stating that unverified accounts will be shut down.

The Ministry of Finance in India claims that investing in Bitcoin and cryptocurrencies in general is dangerous, adding claims that it may be a Ponzi scheme. In addition, in Australia, the Commonwealth Bank of Australia froze bank accounts of customers involved in crypto trading. The bank has reported that the freezing of the accounts was made in accordance with the Bank’s policy, whereby they reject any action related to crypto.

In Europe, the French finance minister expressed his concerns over the dangers of using cryptocurrencies, including money laundering and terrorism financing. The French bank argued that regulation was needed and hoped that a consensus would be reached in the upcoming G20 forum. It seems that regulation in Israel is also on the daily agenda. This week, Shmuel Hauser, chairman of the Securities Authority, announced that he intends to prevent crypto based companies from being listed on the Tel Aviv Stock Exchange.

As of this writing, there are two companies traded on the Tel Aviv Stock Exchange: Fantasy Networks – a gaming company and Blockchain Miner (which changed its name recently).

In Egypt, the Supreme Mufti of Egypt, Shawki Allam, had announced that trading in crypto is forbidden under Islamic law. This is due to the risks associated in the use of these currencies.

Meanwhile, in the US, cryptocurrencies will be taxed during the upcoming year, along with taxes on purchased products using crypto coins and exchanging of crypto coins to FIAT.

More news from Asia

Mitsubishi corporation has announced plans to launch a new kind of insurance for the crypto investors. This insurance would cover cases of assault or bankruptcy in the market or in the exchange in which investors held their money. The goal of this service is to restore the sense of confidence that was lost after the collapse of MT Gox in 2014, where many investors lost all their money. However, it is not yet clear which exchanges will agree to such cooperation involving infringement of user privacy.

More on Japan, Huobi Group, the company that operated the largest exchange in China, announced that it plans to launch two new Japanese exchanges during the first quarter of 2018; this is in cooperation with the SBI Bank.

In other news, many have speculated that the surge in Bitcoin at the beginning of the year was due to influence from North Korea. Yes, among many other factors as well.

Vitalik Buterin

About two weeks ago, Vitalik Buterin, the founder of Ethereum, had moved 30,000 ETH coins to Bitstamp, but has yet to give an official announcement that he intends to sell the amount. Later this week, Vitalik warned of the direction that the crypto community is heading through, and added that if the community does not change its approach and mentality, he may leave crypto. Keep in mind that despite Ethereum being decentralized, Vitalik is a key player in the project, and he has a significant impact on the project. In relation to this, two weeks ago Litecoin’s founder, Charlie Lee, announced that he had sold his Litecoins, this resulted in Litecoin’s price decline by around 50 percent.

National Cryptocurrency

The Bank of England announced the possibility of developing a cryptocurrency for the country in the upcoming year. The news came just a week after the Bank of Israel had announced on the digital version of the Shekel currency. At the same time, Venezuela is also launching a national cryptocoin – EL Petro, which will have the value of a single oil barrel. The project has been allocated about 5 billion barrels of oil, and the government intends to allow the mining of the currency.

Bitcoin Forks

On the 28th of December, the Segwit2 hard-fork took place. The recent popularity of forks seems to be leading to the skepticism of investors, who refuse to trust the new fork projects.

More news

A survey among 20,000 participants conducted this month in Russia, shows that 49% of respondents want to accept crypto as a gift, and that 73% will increase their investments in crypto during 2018.

The market is unable to cope with the extraordinary loads resulting from the massive influx of new investors, and therefore some ICOs have announced that they may not accept new users at this point.

An interview with the Winklevoss brothers (the brothers who sued Mark Zuckerberg for allegedly stealing the Facebook idea), who bought 120,000 Bitcoins when it’s value was only $11, apparently do not intend to sell them for any capital.

In another news, Propy, a platform for international real estate investment, launched an alpha version with a new feature that allows buying and selling properties in California.

Lastly, the Bitcoin Dreamnet, aka the Darknet’s black market, has added the option to pay in Bitcoin Cash.

Bitcoin

After almost two weeks of price declines, Bitcoin’s price stabilized above $12K mark, showing heavy volatility of $1K movements a day. In the past two days the price has climbed from $13K to $15K where there is resistance in the short term. Overall, the graph appears to be healthy after a correction followed by rapid increases. A little accumulation around these price levels, could lead to another Bitcoin rally. But it must be taken into account that we haven’t seen the low yet. The graph shows strong support around $12K at the moment but if this support breaks we can also drop lower. On the 17th of January, the first CBOE contracts end, and on the 26th of the month, CME future contracts end. It will be interesting to see the reaction of the market around these dates.

BTCUSD

Ethereum

Against the dollar Ethereum opens up 2018 with an all-time high record… above $900. And it seems that the market is set to reach $1000. Who remembers that Ethereum was only 8$ a year ago? The price level have supports which is marked on the graph in the yellow area around $800. The graph looks like as a reversal trend.

ETHUSD

Against Bitcoin, The ETH price is currently rising with resistance areas at 0.066BTC. If it surpasses this resistance, we expect to meet 0.08BTC soon. We haven’t been there since October.

ETHBTC

Bitcoin Cash

Against the dollar the coin is traded around $2500 with a quite strong resistance at $3000. The graph is in a state of accumulation after a positive movement in December. You can see that the support for this price is around $2,000 (where it’s very volatile).

BCHUSD

Against Bitcoin, the price is fairly stable. Support lies around 0.17BTC and resistance is waiting around 0.2BTC.

BCHBTC

Ripple

Against the dollar we all saw a crazy rally the past week, from 20 cents to $3, even higher increase in Eastern Markets. It’s hard to analyze the Ripple graph, but we cannot ignore this uptrend. Ripple correction points are marked in the graph in yellow. As seen on the graph, it becomes more volatile as the price climbs. Will we see Ripple at $10? We don’t know. There are really no limits among the crypto markets, especially during these days…

XRPUSD

Compared to the Bitcoin, the price also climbed a lot. Compared to past rallies there is strong and very close resistance at 0.0002BTC. Support level lies around 0.00016BTC.

XRPBTC

Ethereum Classic

Against the dollar, the price of ETC has been climbing since November and is fairly stable. After reaching a peak of $44 we also saw a massive correction down to levels of $22. Since then, price has been stabilized. It is currently traded in the range around $30, with resistance at $40.

ETCUSD

Against Bitcoin, it’s a different story: the price has been dropping since June 2017. Then, the price’s high was around 0.009BTC. You can see on the weekly chart the support levels which is around 0.0015BTC and resistance lies around 0.0025BTC.

ETCBTC

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